``Tea prices will be rising in October as there could be a shortfall of 55-60 million kg. Already, prices are showing a tendency to rise,'' a Russik Woodworth official told PTI.

United Planters' Association of South India (Upasi) officials said prices, of late, were rising in South India but it was unlikely to reach 1997 levels, when it ruled at record high.

``Prices will not touch 1997 level since export demand is subdued due to limited operations by Russia and central Asian republics,'' the officials said.

India's tea crop is estimated to decline to 835 million kg this year against a record 868.2 million kg in 1998.

During the first half, tea production had declined by 19 per cent to 261.2 million kg against 322.1 million kg during the same period last year.

India accounted for 61 million kg of thetotal 100 million kg crop decline till the first half of this year.

Despite projections of exports declining to 185 million kg from 206.1 million kg, prices were expected to rise in view of pressure on domestic availability.

The Russik Woodworth official said tea prices have crossed Rs 60 a kg at some of the auctions in South India, indicating the trend of low prices witnessed early this year was over.

Upasi officials said average prices of Crushed, Tear and Curl (CTC) tea had improved to Rs 55.47 a kg in South India as on July 20 from the year's average of Rs 50.81, while orthodox tea prices increased to Rs 66.55 from Rs 56.77.

During 1997, CTC tea dusts prices had crossed the Rs 100 a kg mark at one point of time and orthodox prices ruled around Rs 140 a kg.

As on July 20, CTC prices improved to Rs 59.56 a kg in Kochi auctions, Rs 54.53 at Coimbatore auctions, which mainly caters to the export market, and Rs 58.97 at Coonoor auctions.

During the same period, prices for orthodox tea rose to Rs69.51 a kg in Kochi, Rs 71.76 in Coimbatore and Rs 56.80 a kg in Coonoor.

Upasi officials said tea production was set to increase in August and September but it was unlikely to cover the shortfall witnessed in the first half.

``The anticipated price rise could encourage growers to go in for increased production next year as it happened last year after the phenomenal increase in tea prices in 1997,'' industry sources said.

However, Upasi officials pointed out that average prices at Indian auctions were far lower at Rs 66.66 a kg till June-end compared to Rs 105.79 a kg in Sri Lanka.